From Regeneration to Sustainable Entrepreneurship: Inclusive Innovation Capability and Social Legitimacy in Vietnamese Entrepreneurial Firms

ABSTRACT

Firms increasingly commit to sustainability, yet ecological degradation and social exclusion continue to intensify. This has prompted interest in regenerative approaches that restore rather than preserve socio‐ecological systems, although evidence on their organisational consequences remains scarce. Drawing on the natural resource‐based view, this study examines whether regenerative orientation promotes sustainable entrepreneurship through inclusive innovation capability, and whether social legitimacy conditions that process. Two‐wave, multi‐informant data from 236 entrepreneurial firms in Vietnam indicate that regenerative orientation is positively associated with inclusive innovation capability, which is in turn positively associated with sustainable entrepreneurship. The indirect effect is significant and accounts for roughly half of the total effect. Social legitimacy moderates the second stage: inclusive innovation capability is strongly related to sustainable entrepreneurship when legitimacy is high, but the relationship is not significant when legitimacy is low. Inclusive innovation capability therefore appears to yield little return without stakeholder endorsement.